Wereldhave N.V.

Thank you. Good morning, everyone and a very warm welcome from a very warm Netherlands and to the half year 2019 results of Wereldhave.

Today, I'm pleased to have with me here in the room Herman van Everdingen, interim CEO who will provide you with some market commentary and the highlights of the results over the past half year. And I have here Dennis de Vreede, CFO who will take you through the results of the presentation which includes an update on our business in every country revaluations and much more.

Afterwards, there will be the opportunity to ask questions. Having said that, I would like to hand over to our interim CEO, Herman, please go ahead.

Good morning, and welcome everybody. I'm happy to speak to you today about my time at Wereldhave over the past six months.

As interim CEO, it has been my job to prepare the company gradually for a next phase, and at the same time focus on the day-to-day operations. The coming half year will be that natural moment and Wereldhave will be entering the next phase.

And let me briefly explain why. In 2012 Wereldhave adjusted its strategy by moving from a diversified real estate company towards a strong specialist in convenience shopping centers in Northwest Europe.

It has taken about six years to execute this goal bringing back the company that used to be active in seven countries and five sectors to be a specialist on one sector in three countries. Meanwhile, the focus of owning and operating shopping centers has coincided with a structural change in retail markets putting pressure on rents and less demand for retail space.

This brings me to the following points. These half year results highlight several good things as well as some more challenging items.

We understand that for you as an investor, but also for us it has not been good enough at the bottom line not now and not over the past few years. Looking ahead consumer behavior keeps changing faster than ever before so staying on the same path is not an option.

As mentioned, there are good things that should provide some level of comfort. The results show that Wereldhave's portfolio has been able to deliver solid operational numbers even in challenging times when the consumer is becoming more used to omni-channel shopping.

Our direct result from continuing operation has grown by 8%. Our shopping centers have a growing number of visitors that reached 64 million visits.

Tenant sales were stable overall. Our occupancy has been on high levels and our like-for-like rent growth is growing again.

Taking the pressure on the group's top line into account our operational results have been very good over the past six months. This amongst others underpins the quality of our teams in all three countries.

But the challenges are also visible. The value of our portfolio declined substantially.

It pushed our total result into a negative number. The negative revaluation was predominantly the result of a yield shift.

We must face that investors in retail estates currently demand a higher risk premium, before they consider investing in our type of assets. It highlights the current concerns of the real estate investment market about shopping centers.

Finally, a change in the Management Board. Following the entry of Dennis as CFO last year we now welcome Matthijs Storm as CEO of Wereldhave as per the 1st of August.

In his profile you can read that he's a young and ambitious person who's able to fully understand the needs of the upcoming generations. He has been a successful investor in direct real estate and real estate securities.

And he knows the importance of executing a very disciplined data-enhanced capital allocation approach. And last, but not least he knows what the importance is of strong teams within a company.

In conclusion, we know we need to do better and are comfortable that with Matthijs and Dennis we have found the right management team that will direct Wereldhave into the next phase. With the strategic review ahead we will be focusing on the opportunities from a challenging from a changing landscape.

Of course, you would like to know already what that will be. Although I understand – fully, understand all I ask from you is patience.

The outcome will be presented on February 7, 2020 at the full year 2019 results publication. With these elements combined I'm comfortable to leave Wereldhave on a path of future success.

Now let's move over to the presentation of the results. I will skip the company profile and start with the highlights at page 5.

Looking at the direct results from continuing operations we can see an increase of 8% to €1.44 per share. The increase can be mainly attributed of €0.05 per share to the interest cost reduction from the proceeds of the disposal of Itis.

Other than our positive like-for-like effect we had some impact from acquisitions in Belgium and some development projects. Our indirect results, I referred already to it was minus €3.09, which is below the level of last year.

This is the effect of the negative revaluation. This is also visible in our EPRA NAV, which declined by 6.7% to €40.90.

And it influenced unfortunately our LTV too which moved up to 40%. We have narrowed our guidance on our direct results for 2019 to €2.75 to €2.80.

This is at the lower end of the previous range. It also shows that we expect a decline in the direct result per share, in the second half versus the first half.

The main reason for this is that the impact from retail bankruptcies did not have a big influence on the numbers in the first half of the year. It will become more visible in the second half.

As we have communicated earlier, the dividend level for the year 2019 will remain flat at €2.52 per share. Anticipating on all your questions, you might have for the 2020 dividend, I can say no more that we will communicate on this at the publication of the full year results on February 7, 2020.

Then we move to page 6. As you can see, our like-for-like has remained positive at 0.6%.

For the shopping center portfolio, this continues to be an uptrend at 0.8%. I immediately have to say that in the first half of the year bankruptcies did not have a major impact.

I reiterate that the impact of the bankruptcies will become visible in the H2, like-for-like numbers. Going through briefly to the different -- the differences by country.

Belgium, the overall growth is mainly the result of the acquisition of the retail parks in Brugge and Turnhout at the end of last year. But also the opening of Tournai in April last year still had a positive impact.

The effect from CoolCat bankruptcy, which is about 1.3% of our Belgium occupancy, had an effect starting Q2 already. France, this remained a tough market where the effect of the Toys"R"Us bankruptcy, had an impact together with some negative rental reversions.

The Netherlands, still a decent growth at 1.5% like-for-like, but bear in mind that we had no effect from the CoolCat bankruptcies in the first half and CoolCat account for approximately 1.3% of our differential. On the Belgium offices, the overall growth was lower than the like-for-like, due to the disposal of our office at Jan Olieslagerslaan last year.

And with this, let me hand over the presentation to, my colleague Dennis.

Thank you, Herman, and good morning, all. Before I take you through the rest of the presentation, I wanted to take the opportunity to thank Herman for his very positive contribution and leadership over the past six months.

And I think the handover to Matthijs will happen over the next few weeks. Looking forward to start working with Matthijs going forward from the 1st of August, And with that I am at page number 8.

And as you can see, the leasing market has been very dynamic overall with 190 contracts closed in the first half of the year. Rent levels across the board have been relatively stable.

The differences between, the different countries have been large. In Belgium, we have been able to increase rent levels, but less so in France.

In the Netherlands, the decline in MGR has been a result of two larger deals we did. We've been able to agree a package to deal with H&M and keep all seven locations open.

And we limited the Intertoys' bankruptcy impact from all 12 locations. However, it did obviously have an impact on our rent levels.

Overall, we've been able to reach 0.8% like-for-like growth. But we do point out that we expect like-for-like rent growth to be negative for the full year of 2019.

Turning to page 9, as you can see here, our like-for-like rent growth has developed positively in Belgium and France. In France, we've seen for the past three years basically a slightly less negative like-for-like growth.

In the Netherlands, we outperformed indexation again, albeit slightly lower than for the full year 2019. Page 10 moving over, overall, I think our shopping centers have been kept quite well occupied at 95.6%.

In Belgium the decrease is largely the effect of the bankruptcy of CoolCat which impacted in our portfolio of four locations. In France, it's due to a few departures, but mainly as Herman already mentioned, the Toys"R"Us in Docks 76 in Rouen runs into the numbers and accounts for almost a full percent.

The decline was mainly visible in the first quarter. And only for 20 basis points in Q2.

Page 11, the number of visitors to our centers have grown by 1%, which is above the market that saw a decline overall of 0.6%. A similar pattern was feasible in both Belgium and the Netherlands.

I think considering the impact still of yellow vest demonstrations in France, we're quite happy to show in France only a minor decline of 0.4% in footfall for the first half. The impact of yellow vest demonstrations is getting smaller and therefore impacting footfall positively from Q2 except for Bordeaux where we still see demonstrations happening almost every Saturday.

Overall on page 12, the like-for-like tenant sales have been flat on average for our Belgium and French portfolio. We're very happy to see that sales of our tenants in Belgium grew by 2.7%, this in a retail market that has seen an overall decline in retail sales turnover.

For France the negative development has been particularly visible in the fashion segment. However we do see an improving situation versus the second half of last year.

In line with the visitor numbers, turnovers have improved in the second quarter in France versus the first quarter. Moving to the financial results, let me take you through the development of the direct result on Page 14.

Our total direct result decreased with EUR 8.7 million to EUR 65.8 million. Obviously the largest part is the difference between total and continued operations which comes from the disposal of Itis at the end of 2018.

From that basis our direct result has grown with EUR 6.1 million. I think the numbers on the page and the explanations they explain themselves as it breaks down the development, acquisitions, disposals, general costs, interest effects et-cetera.

And I'll get back to that a little bit later in the presentation. On page 15 a more detailed bridge has been provided for you on the development of our net rental income.

For the continuing portfolio net rental income grew by EUR 3.9 million to EUR 87.4 million mostly due to the effect of the acquisitions. As you remember we acquired two retail parks in Belgium late last year.

And we also acquired a C&A store in Tilburg this year causing about EUR 2.5 million of that effect. It's also worthwhile to mention that we've received about EUR 1 million in indemnities in key money that can be considered as one-offs.

And therefore I wanted to show that separately on this slide. On Page 16 you can see the breakdown of our indirect result.

The total indirect result was negative EUR 125 million for the first half of 2019 mainly due to the negative revaluations of our outstanding portfolio. There are some offsetting small effects on the result of disposals and taxes on indirect result as well as our expenses on improving the Customer Journey and other income and expenses.

The majority however, again is the negative revaluation of the property portfolio of EUR 123 million. And this is mainly due to the continued pressure in real estate investment market.

Let me explain this a bit more by moving to the next slide. The overall activity on the investment market for shopping centers across Continental Europe has been very low.

Although there are some pockets of liquidity, potential investors take a wait-and-see approach in general. For France the activity level has been extremely low.

We understand there are some deals in the pipeline, but there are also several centers that did not sell. In Belgium the activity level has been low over the past 12 months as well.

The last pricing points however has been at yields below our valuation yields in our portfolio. In the Netherlands, a lot has been for sale and only a few transactions have taken place.

One obvious one is the disposal by Klépierre in Almere. Others are somewhat smaller centers in smaller cities.

Following the value adjustment in our Dutch portfolio, the yield and price per square meter are in line with the average of our Dutch portfolio. This did have an impact on the average valuation yield of our Dutch portfolio which has moved up by approximately 25 basis points.

On page 18 you can see our portfolio details per country a bit more in detail. Moving over to page 19 on the revaluations, I think this is an important analysis we did for ourselves between the rent and the yield effects have been shown on this page.

Highlighting the most important movements, in France we see the rent and yield effect being roughly equally divided. In the Netherlands you can see that revaluation -- the negative revaluation mainly comes from the yield shift witnessed in our portfolio.

This is obviously something we have hardly control over as this is determined in the external market by our external valuers. On the debt profile moving over to financing, page 21.

A few elements I'd like to highlight. The average interest rate went down from 2.08% to 1.90% for two main reasons: we did acquire some relatively cheap funding in Belgium through our commercial paper program; and we have less debt on our balance sheet due to the debt repayments from the proceeds we did from our disposal in Finland.

Due to the value adjustment of our portfolio, our LTV has increased to 40% which is higher than -- obviously than at the end of 2018, but it still provides us a lot of headroom towards the debt covenants. Our debt mix on page 22 provides you some insight in our funding.

The main debt repayments in 2019 consists of a U.S. private placement repayment of €56 million and obviously the €250 million convertible which we repaid in May.

This leads to a somewhat changed debt mix as you can see on this slide. Still, we are very well-diversified from a funding perspective and also a well-spread maturity profile.

Moving over to page 23. We keep our front position on ESG Practices.

Well-respected rating agencies on this such as GRESB MSCI and Sustainalytics rank us very strongly. And we've provided some examples here.

Another of -- several other initiatives we've highlighted on page 24. We keep focusing on accessibility by supporting mobility initiatives for the elderly community by sponsoring small electric cars.

We keep installing green roofs on our centers to increase biodiversity increase installation and reduce water stress. On top of that, we've installed nearly 3,000 solar panels on our four -- on four of our Dutch shopping centers over the past half year.

Moving to page 25. Going forward, we will sharpen our focus on ESG efforts.

We have recently hired a new ESG manager in our company. And we're focusing basically on a new strategy going forward.

There have been an increasing number of ESG initiatives which all require a lot of capacity. As investors like us to stay cost-conscious while maintaining a strong ESG performance, we have to make decisions.

Following also, a number of consultations with the investment community, we've decided to continue with GRESB, the Carbon Disclosure Project on a portfolio level and BREEAM on asset level. This means that we will no longer focus on the Dow Jones Sustainability Index from now on.

Moving over to the country updates with Belgium first on page 27. Without reading out all the slides for you, I'll just take you through the highlights.

Within the economic context of somewhat lower growth and retail sales coming down, retail turnover in our centers did very well with a plus 2.7% growth. This is also seen in 4.4% more visitors, which does consider obviously the opening of Tournai our shopping center in Tournai last year in April.

However, the sentiment in retail has not very much changed over the past half year. It still is dynamic with long decision-making and relatively low appetite for larger floor plates.

This is particularly the case as we have all read in the news in B-quality high streets and smaller cities. For our shopping center portfolio, page 28, we still see good demand.

Although the fashion segment remains struggling, we still see quality retailers taking on good quality locations at attractive rental rates. This is the reason, why we still have been able to show an increase in our MGR of 6.6%.

Our occupancy dropped 1% in Belgium due to a number of bankruptcies, mainly the bankruptcy of CoolCat in Q2. This still resulted in a like-for-like rental growth of 1.9%, which is almost at indexation.

The outlook for 2019 like-for-like rental growth from Belgium is lower. However, we expect it to come down, but stay marginally positive.

Again, this is mainly due to the impact of a number of smaller bankruptcies and CoolCat, which will take effect in the second half of 2019 and the expected remaining vacancy due to the departure of Carrefour in Genk for which we received rent until November. On page 29, a number of recent shop openings in our Belgium portfolio.

And I thought it would be good to give you a quick update on the Carrefour discussions in both Liege and Genk. In Belle-Île in Liege, we used to operate a 10,000 square meter hypermarket unit, which we already announced before is being split into a 4,500 square meter supermarket which will be continued to be leased by Carrefour.

Several smaller units which are all -- which are nearly all leased out to Decathlon Action Ville Neuve Medi-Market and eyes and more have been signed all in the first half of 2019. Opening of those units is expected in the second half of 2019.

And only, 600 square meter of available floor space remains from that 10,000 square meters. So I think a good performance of our Belgium leasing team.

The Shopping one situation in Genk. Previously, the 6,000 square meter hypermarket unit is being split into a 27 -- almost 2,800 square meter supermarket which is leased to Albert Heijn.

Medi-Market has signed for a unit and other units for which the commercialization is ongoing, is looking quite well. Additionally, at Shopping 1, we've also leased out a 1,000 square meter unit to The Fashion Store.

This together brings the occupancy for this center above 90% for the first time since we acquired the shopping center. Moving to France, on page 30.

France remains a challenging market for us. Although, we see some improvements in Q2 versus Q1.

Like I said before footfall improved as the yellow vest demonstrations are getting a bit less, which was in line with the improving development in tenant sales. However, our tenant sales are still below the market as we are somewhat overexposed in France towards the fashion segment.

That is obviously a segment which we all see that keeps struggling in France. Segments like Sports, Homeware & Households and Services are developing much better for us.

On page 31, you can see that our like-for-like rental growth is still negative, albeit less negative than before. This is due to some negative reversion that we must deal with, indicated by our MGR decline, but also increased provisions for bankruptcy.

For the second half of the year, we expect the knock-on effects of the yellow vest demonstrations to have an impact in France. This is likely to lead to an increased level of bankruptcies.

On a positive note, we're quite busy with the works at Mériadeck on the upper floor, to provide space for the well-known gardening center Truffaut. This is expected to open in Q4.

Meanwhile, we're still busy making plans for the former Toys"R"Us unit in Docks 76 in Rouen. That, as said before by Herman, is a 3,000 square meter unit.

And we are in a very positive commercial discussions with two or three tenants to take the entire space. Also we're comfortable of having several deals in the pipeline for the second half of the year.

However, these are likely to take effect in 2020 and not so much contributing 2019. As a result, we currently expect for the full year 2019 the like-for-like number to be slightly below that of the first half.

On page 32, you'll find some recent shop openings in our French portfolio. And I think the Bershka in Docks Vauban, Le Havre is a very interesting one to point out.

Moving to the Netherlands. The market in Netherlands is absorbing the increased supply from bankruptcies that have been visible mainly in the first quarter of the year.

Within one quarter, we've been able to successfully deal with about 70% of the locations that were involved in a bankruptcy. And I think you've seen the names in the press.

Intertoys was a big one for us. Like anywhere else the fashion segment also in the Netherlands remains challenging.

In the Netherlands our centers can rely on a strong demand from the expansion of supermarkets. Still, we've closed contracts with six supermarkets during the first half of the year, totaling some 17,000 square meters.

Five out of those six locations were extended. On page 34.

Our performance on like-for-like rental growth has been strong at 1.5%, slightly above the indexation. This is also because the bankruptcies in the first half hardly had an impact on our first half results.

CoolCat only restarted very briefly to sell out the remaining inventories at our stores. These stores will likely close in Q3.

This is about 1.3% of occupancy in Netherlands. Also in the second half of the year, we will see the impact of the renegotiated rental contracts at lower MGRs than you see in the first half.

This, obviously, means that our like-for-like rental growth in the Netherlands is likely to be slightly negative for the full year of 2019. On a positive note, again, we're very happy that the attractiveness of our shopping centers remains for the bigger retailers.

For example, like I said before, we have strong demand from supermarkets and all the seven H&M locations will stay at our centers. And again, all of the 12 former Intertoys locations are re-leased already in the second quarter.

On page 35 some recent shop openings, which I'll leave for you to look at. Two small transactions happened in the Netherlands on page 36.

We acquired the C&A property in Tilburg as part of our inner city redevelopment for about €11 million. Secondly, we sold the former V&D asset in Hoofddorp at book value for about €7 million, transaction to be closed in December this year.

Moving to page 37, on our development pipeline in the Netherlands. The Koperwiek has seen several stages of completion already in Capelle aan den IJssel and now it's pre-leased at almost 90%.

We expanded the project, which will now contain a jumbo food market. We have committed to a project in Dordrecht for the extension and refurbishment of Sterrenburg.

The extension is mainly the Jumbo supermarket, which in the existing site will be replaced by Lidl. The total project is pre-leased for 90% and scheduled for completion in 2021.

At Presikhaaf in Arnhem, we've increased our pre-leasing level to close to 80% with very good comfort of moving towards full pre-leasing around the turn of the year. We are in commercial talks with an international supermarket and have very strong demand from a mixed-use health care tenant following the lease-up in the basement of Basic Fit, which we announced earlier.

In Tilburg, we've committed to redevelop the final part of this inner city project. This is the construction of Frederikstraat-Zuid.

This will connect the Emmapassage or the former Emmapassage I should say to the Pieter Vreedeplein. Demolition of the roof of the Emmapassage is already completed.

On page 38, I found it important to give you a brief overview of our Customer Journey progress. I think all in all, we can say that the four projects: Wayfinding, Restrooms, Parking and Play & Relax are on schedule.

As you can see, there's integrated standard look and feel grade by having the same Wayfinding in the center and in the Parking garage. Our Restroom concept has been very much upgraded.

And we are installing Play & Relax areas. The team is executing this very well and we have still some works to go into 2020.

Moving over to the final part of this presentation before I open it for Q&A. Page 40 the outlook.

As we mentioned per country, we believe that the like-for-like rental growth for the second half of the year will be lower than the first half. This is mainly because of the bankruptcies and some expected bankruptcies.

As a result, we expect that the direct result for 2019 to still come in between the €2.75 and €2.85, but we've lowered the range to €2.75 to €2.80 per share, which is at the bottom end of that range obviously. As mentioned earlier, we will keep our dividends stable at €2.52 per share over 2019.

Moving to the final sheet of this presentation. I think all in all, we can rely on a stable platform of Wereldhave.

It is a focused business model on convenience retail. Our customer-centric approach on the daily needs of the consumers have and will lead to a further improvement of our operational KPIs.

Our balance sheet is strongly positioned for the future and there is limited risks from development large assets or any major tenant. We can tap into multiple source of funding in order to keep our funding costs as low as they are today.

We have a continued focus on cost control, as you can see on our overhead costs. And we can run our operations efficiently.

As Herman mentioned before, the second half of 2019 is a natural moment for us to do a full strategic review and prepare Wereldhave for the next phase. With Matthijs starting per the 1st of August this will be top priority for the second half of the year for our Board of Management and Supervisory Board and of course our senior management team.

We will communicate on this at the full year results 2019 in early February 2020. Having said that, I'd like to open this presentation for questions.

Okay, good morning, everyone. I've got a few questions, so let's kick off with the development pipeline.

There were some changes happening in terms of the size of the projects for the ongoing ones like in Koperwiek and Presikhaaf at some €32 million to €38 million from €20 million to €23 million yield on costs moving from 5.4% to 5% 6.8% to 6%. And now you're communicating on the Dordrecht project in the filings that it's €14 million in the presentation that it's €16 million.

So I'm just wondering is there anything you want to comment on the cost of let's say construction costs? Or what's driving the falls in the yield on costs and the increase in the project size?

Is that just driven by the cost side? Or maybe we can start with that.

Thank you.

Okay. For your quick question.

And of course, this is something we very much keep an eye on, on our development projects. As said before last year, we continue to I would say decrease our development project pipeline.

We used to have about 3% of our portfolio value and we keep focusing on only the right projects where we believe we make a decent yield and which are adding to I think the core values of our portfolio. I think if you look at the ones you mentioned in Tilburg, the change there is basically caused by the fact that we are now entering the final phase of our inner city project in Tilburg which is like I said before which is the demolition of the Emmapassage and creating basically a new high-end shopping street.

The net, I would say, CapEx there for Tilburg is about €16 million which consists basically of a gross investment of €34 million, but we have a number of disposals in terms of parking some proportion of land which actually take the number down to €16 million net. If I just -- I think you also had a question on Presikhaaf.

I think there what we did there, the scope has been slightly adjusted to also accommodate a new international supermarket. It's more like an ethical supermarket which is I think adding a lot of value to that location and that's why we increased the total investment budget there a little bit.

On De Koperwiek in Capelle a/d IJssel, we've also there signed the Jumbo and we have negotiations with another -- I would say a strong branded supermarket also ongoing. And therefore we have increased basically the budget there with about €six million for as we call it Phase 4.

And then lastly Sterrenburg which is our shopping center in Dordrecht. I'm very happy to say that both Jumbo and Lidl signed for that project which only leaves us with a very limited amount of space to let.

And I can only say we feel quite comfortable with the yields on cost which we have disclosed here.

Okay. Just to clarify with Dordrecht then is it €16 million or €14 million?

Because you have conflicting figures in the presentation and in H1.

I think I have on Dordrecht I have €14 million. That should be the right number.

Yes.

Okay, perfect. Just to follow-up on Genk the Shopping one center then Carrefour is leaving there on Q3 with 6,000 square meter of GLA.

Albert Heijn is going to take about 2,750. How much is Medi-Market, if I said that correctly going to be taking from the remaining GLA that's left from Carrefour?

I think the Medi-Market -- yes, so I'll take the question. I think I will need to double-check it.

I think the Medi-Market has signed for something close to 1,000 square meters. I think it was like 900 square meters.

Okay. And maybe the last one regarding Belgium, you mentioned in H1 that there's some plans for mixed projects or some developments.

Do you want to provide a bit more color on that? What sort of things are you considering?

Is it just adding residential or--

Yes. Good question.

In Belgium, we -- well, let's put it like this in general, we are focusing on mixed-use. And if I say mixed-use, we internally use the terms horizontal mixed-use versus vertical mixed-use.

Horizontal mixed-use is in our opinion is adding other than let's say traditional retailers to our convenience centers. And that means health fitness centers, day care, those type of new tenants basically to keep our centers well occupied and basically remain fruitful.

On our vertical mixed-use that is where we are conducting a study basically through our entire portfolio looking at the locations where we can indeed let I would say residential space, co-office working space, and those sort of additional square meters where available. In Belgium, I think a good example would be Belle-Île our shopping center in Liege.

And that's where we are also conducting a study of not only extending our shopping center there, but also are looking for the longer term can we add there additional square meters in terms of residential?

Okay. Is your intention also to keep let's say the mixed-use parts or then potentially dispose them or put them into a JV or what have you?

Yes. Well, that's something which we will be looking at over the next let's say half year with the arrival of Matthijs and the strategic review we will be conducting.

JVs is always something we're interested in. I think Belle-Île would be a perfect asset for another investor to step into.

And keeping or not keeping -- or keeping or selling basically any vertical mixed-use opportunities, I think that's something which we will be very carefully reviewing over the next six months and we'll disclose that early next year.

Okay. Then very last question about Genk.

You mentioned that you acquired some units there. Can you maybe provide a bit of detail why this was done and what's the purpose?

Yes. So, in Genk, we still have there, of course, it's a portion of ownership.

We own the majority of the shopping center, but there are still a number of units which are owned by mostly private investors. To create space for The Fashion Store which is a well-known Belgian fashion retailer we had to buy two or three units small units to add them to some vacant units of our own portfolio to create I think over 1,000 square meters of shopping floor for that particular tenant.

Okay. Thank you.

Yes.

Hi. Good morning.

My first question is on the loan-to-value. So the changes in the first half caused the number to move back to 40%.

Could you maybe just quickly discuss your view on the level of this number? And what do you see appropriate?

And does it warrant revising of the disposal targets? And then as a sub-question historically the 40% loan-to-value level has been linked to executive variable remuneration mostly.

So I was wondering if it's also going to be case for the new...

Let's say the rise in the loan-to-value to 40% implies that it's now at the upper end of our let's say range which we use internally. However, at this stage we don't think that this immediately should lead to actions or steps in a way that we should speed up eventual disposals of our assets.

It's a level we would like to see a little bit lower. But for the time being we also are pretty comfortable with it.

Your question on the remuneration as it's partly linked to this LTV level it's not an item that has been discussed recently with the Supervisory Board. So for the moment let's say that element will stay in place.

Okay. Thanks very much.

So that means that if at the end of the year leverage is higher than 40% there will be sort of limited or less compensation if that's correct and the base for the new CEO so just to...

Yes. I think you're that's -- I think your conclusion is right.

That's the only thing I can say now that at this moment.

And then my second question would be on the outlook. Obviously you've fall -- on direction of growth.

You've got an overall where vacancy should land at the end of this year?

On vacancy or on occupancy we try to look at it from a half-full perspective. I think what we see is the following.

We see a continued pressure in France on occupancy levels. However, I think, in the Netherlands and Belgium we still believe that occupancy will hold quite well.

I mean without knowing of course of any major bankruptcies in the second half of the year. I think we should be landing I would say quite close to where we stand today.

And again there I think the major part of the work we need to do internally is to make sure that we keep focusing on France to move them up again.

Okay. Thank you.

And then finally given the strong positive impact of the extension of one of the malls in Belgium last year could you maybe also indicate if you have today available what the underlying tenant sales and footfall data was for kind of the rest of the portfolio excluding I think Tournai was?

For Belgium indeed, I think, if you look at the tenant sales and the footfall -- footfall first and I think we also announced that last week during our Belgium of course update. Visitors I would say to start with in Belgium like we said before were up with 4.4%.

And a very large contributor to that was indeed Tournai Les Bastions with 15.2% growth. And obviously that effect will dampen a little bit over the next half year as we opened that in April last year.

I don't think I have the let's say the sales numbers per shopping center available for you here right now, but like we said before sales for Belgium were actually quite up with 2.7% compared to the annual basis of 0.9%. I think if you would break it down and this is more by category and not so much by shopping center, I think fashion and accessories are have been quite stable.

I think food is doing extremely well especially in Belle-Île there are a few food tenants doing extremely well. Health and beauty is I would say quite stable.

Multimedia is doing very well on the telecom side, but toys are underperforming. And I think if you look at Nivelles, we see there an important increase year-to-date of about 4.3% and also on an annual basis 3.4%, which is basically all categories were positive here except again fashion and accessories.

Okay. Thanks a lot.

And to give you some – sorry to give you some further feedback on the sales numbers as Les Bastions entered the portfolio this is not in the like-for-like sales numbers, so the 2.7% excludes that. And for footfall, the only center that had negative footfall was Belle-Île due to the Carrefour hypermarket that had closed down.

Hello, everybody. I got two questions both concerning the debt.

So first concerning the treasury note program you have increased in the first half, what – or do you have a target of the maximum of treasury notes you can reach in let's say the coming one or two years? And the second question, concerns the covenant not the current covenant 60% with which you are very comfortable with, but the potential behavior of lenders in the future on that figure of 60%.

Could you – don't you think that this 60% could maybe come back to something like 50% and push you to be a little more reactive on the financing side?

Okay. Christian, thank you for the questions.

So your first one was on the Treasury note right? I mean, you're asking me like what's the level we can reach there?

I think in Belgium that's basically where we are using we call the commercial paper program treasury notes. We have €100 million program currently.

And we've been able to draw €98 million out of the market in the first half against obviously very favorable conditions. Looking at the LTV, or I would say the covenant percentage question.

I think 60% is what we have today in all of our let's say credit arrangements. And will that come down?

We have no indications to believe so. We are currently looking into ways to refinance most likely over the next six to nine months in order to basically cover maturities coming up early 2020.

And so far the discussions – the initial discussions I would say and explorations we're doing today are still looking quite favorable and do not lead to any concerns about the 60% covenant level.

Thank you.

Yes. Good morning.

My apologies if my questions overlap because I missed the start of the presentation. I had a question on the development pipeline.

I am a bit bemused that there is no – after the Verrerie completion there is no real significant CapEx on France. The French portfolio doesn't look to me to perform as desired and still there is no real CapEx on that.

So that's my first question. My second question then on – I'm sorry to come back on LTV.

The 40% LTV now in 1H does that mean that the extension of Belle-Île I'm not talking about the small cash forwards I'm talking about the extension that was done years ago. That is still going to be on hold for the foreseeable future?

And then, I had a question on – a bit of question on financing too. The Belgian subsidiary trades with a significantly lower discount sometimes close to no discount.

How – is the growth of the company going to come from local funding? Or is Wereldhave the Dutch company prepared to dilute itself from the current 70%?

Thank you.

Good morning, Herman. Thank you for your questions.

So, on the development side, the development project, I think we are investing in our French portfolio. It's not as obvious anymore in a development overview, which we have provided here.

But as we -- as I said basically in the presentation, we are finishing the works of Truffaut in Mériadeck in Bordeaux. Secondly, as I think everyone knows, we have finished the redevelopment we call it of the Verrerie in Saint Sever back in December, which was quite an extensive project.

We have -- very recently Herman and I approved an investment proposal for Saint Sever for we call it Phase 2, which is basically the refurbishment of the rest of the shopping center there. We're also preparing further works, I would say, in Saint Sever for potentially another big international fashion retailer to get there.

So, we do keep an eye on that. We certainly keep an eye on that in France.

In Mériadeck, next to the finishing of the works of Truffaut, we are looking to upgrade our F&B area. So, we are currently researching what we can do there.

A feasibility study is under way. As you may or may not know there's a foot bridge from the shopping center across the road to an adjacent park where Intersport left about six months ago.

And that is, we believe, an ideal area to basically expand our F&B offering in the Bordeaux shopping center. So, moving to your question on Belle-Île in combination with our 40% LTV.

Belle-Île is still being looked at by our Belgian team. We have -- they have basically conducted another study over the past three months to change the, let's say, the extension plans, which now look to be a bit lower in terms of investment, but we believe it's a much better plan.

Over the course of the next three months, I will be looking at that plan together with Matthijs, our new CEO. And I do not believe that the 40% LTV should be in the way of approving such a plan.

But I think, what is more important, obviously, is that we'll look at the project at its own merits and at its own financial, let's say, return expectations before we move on with that, before we approve such an important project. And I think that also could combine a little bit with your last question that our Belgian shares are trading with a lower discount than the, let's say, the overall group shares of Wereldhave.

If those shares stay more or less with a lower discount or close to no discount, that could also be an opportunity for us and for our Belgian team to finance such, I would say, major renovation project like we demonstrated last year in December when we were able to buy two retail parks and finance almost half of that with issuing new shares of Wereldhave in Belgium.

Thank you.

Yeah. Just one quick follow-up question, regarding the net initial yield for the Belgium portfolio.

It was stated in the first half results, at the notes, to be 5.7%. And now when I look at the presentation, it's mentioned on page 18 as 5.5% and that -- but then there are no major assets in development in the Belgium portfolio I guess.

So, I was just wondering if there's a typo. Or what's causing the difference here?

And if there's a typo then which one is the correct?

I think that there is a restatement in the figures. It could relate to the acquisitions that have been made.

But I will look into the numbers, and provide you with some detail later on. I cannot give an explanation right now.

No worries. Thanks.

Hi. Good morning.

Can you hear me?

Yeah.

Okay. I had three questions.

The first one is on the Dutch operations. And just to understand the -- first of all, the re-leasing of the food retail space.

So, first of all, congratulations, that's a great achievement. Just wanted to see whether we could have some color on the rental levels and the duration?

On average these deals are at ERV and at previous rent levels.

Thank you.

And so, the standard lease term of 10-year applies.

Okay, perfect. Thanks.

And the other question I had is, obviously, Holland is a bit specific in Continental Europe in terms of the extent of the bankruptcies. I was just wondering how much of visibility have you got and ability to be proactive in the sense of getting turnover data from your retailers.

How much of your portfolio will you have turnover data? And how can you -- to which extent, can you anticipate those tenant stress and these events?

Yes. For the Netherlands that's still rather limited.

So it's below 10% that we have full turnover best information from. We have a key account management team in place in order to have more day-to-day information about how the tenants are operating.

Of course, we have a credit management system where all the payments we monitor closely and the payment behavior. We give no detail what the outlook is right now but -- because some of the tenants can be on a watch list for years and nothing happens and all of a sudden it could happen.

So we don't want to raise any kind of speculation on this. But we have certainly an upfront management system in place.

And perhaps also can I…

Okay. Thanks for that.

Then I guess the values are waiting for the actual events to take place, for instance, the renegotiation of H&M or if you have CoolCat impacting the second half they will wait for that period before adjusting the values they said that they don't take views on future events?

Your question again is that -- you're saying does CoolCat have…

I'm basically trying to understand, basically the H&M lease renegotiation probably started I would say -- I would expect last year. But the value have seems to have taken the hit in H1.

And my question is, how much do they know effectively about the ongoing negotiation, the business plan and so on? And the related question is you're expecting a bankruptcy or a lease event with CoolCat in the second half whether that's already taking into account into the valuations?

Thank you.

Yeah. So that has been taken into account in the valuations.

I mean CoolCat was basically bankrupt in the second quarter, so that has been -- that effect has been taken into account in the valuations of our -- basically of our Dutch, Belgium and French portfolio.

Okay. So it's just the like-for-like rent impact in H2 that will be recognized?

Yes. That will be affected in H2 basically by the fact that we've not been able yet to find immediate tenants for that open space.

Okay. And the very final question, there were lot of questions revolving around the LTV.

And thanks for the transparency and the explanation. I just want to make sure I understand 100%, the point on the bonus and the incentives.

So there was a 40% limit to be achieved. Does that also apply for the compensation to be received by the departing CEO?

So the question on the 40% LTV and basically the impact on the remuneration for the Board of Management. That's a valid one.

I mean that has been changed. So basically this only applies for the LTI part of the remuneration for the Board of Management, which is basically a circuit breaker so to say.

So if the LTV at the current remuneration, let's say conditions if the LTV exceeds 40% there will be no LTI for the Board of Management.

Okay. But I guess my question is was the departing CEO able crystallize the LTIP given the fact that the LTV was within the bank?

No. He did not because the EPS -- there was no EPS growth last year.

Okay. That’s very clear.

Thanks for that clarification. Thank you.

Hey good morning. Just one quick question for me.

I think at the full year results you mentioned a marginal cost of around 2.5% to 2.7%. I'm just hearing you talking about some refinancing opportunities coming forward over the coming six to nine months.

I'm just interested to see if that has evolved over the last six months. Is the cost of debt of the market still between 2.5% and 2.7%?

Or has that changed for you?

Yes Neil thank you for the question. Yes, it has evolved a lot.

You see that margins have come down dramatically since the early start of the year. We have for five-year money we would estimate that we have a marginal cost of debt of about 1.8%.

Okay, perfect. Thank you.

Okay. Well, thank you for listening to the presentation all your questions.

And we hope you will still enjoy a nice summer. And for any of you that will still go on holiday, have a good holiday and we'll speak to you soon.

Bye-bye.